Thomas Piketty Says Labor’s Share of Income Is Declining, But Is It?

The growing share of income going to capital and the shrinking share going to labor leaped to prominence when the French economist Thomas Piketty’s book Capital in the Twenty First Century became a surprise bestseller last year. He cited the rise in capital’s share of income in rich countries between 1970 and 2010 as proof of his thesis that rising wealth and inequality are inherent to modern capitalism. But several economists and papers in recent months suggest that labor share’s of income hasn’t really been on a steady downtrend.